Comparison of On-Premise Vs Cloud-Based PBX Benefits and Costs

When choosing a phone system, businesses are often faced with one critical decision.  

Select an on-premise or cloud-based phone system?

With an on-premise solution, your phone system is centrally stored at your location, and your or your IT company will need to provide the service and maintenance. A cloud-based solution uses your Internet connection to connect to the cloud, requiring no additional hardware beyond the phones. System updates are all handled directly by your VoIP provider.

Cloud-based systems are growing in popularity due to remote work environments and the benefits they provide over an on-premise system.

Let’s take a look at the benefits cloud-based PBX provides over on-premise.

On-Premise

Cloud Based

Cost

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• Can be up to 40% more costly than cloud-based, requiring cabling, hardware, closet space, electrical and cooling

• Pay in advance for planned growth

• If your business has multiple locations you will need multiple systems

• Upgrades and maintenance costs can add up over time

• No hardware costs except for the phones themselves

• Pay only for what you need and use

• Multiple locations are supported by one phone system
  in the cloud

• Most features and upgrades are included in cost

Installation

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• Installation takes longer with on-premise due to significant hardware required for the set-up. More office space needed to store equipment.

• Quick and easy setup and installation due to minimal hardware deployment.

Scalability

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• Hard to scale, requiring thorough planning and accurate forecasting of needs.

• Takes weeks or months to add or delete phone lines.

• Scales to your needs as you grow, using exactly what you need when you need it.

• Phone lines can be added or deleted quickly. In days in most cases.

Maintenance

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• Requires an IT Specialist to manage and make changes.

• Other than phones, no maintenance is required.

Upgrading Features

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• Time to market varies

• Upgrades requires manual updates from an IT specialist or the hardware vendor

• Technology is always evolving and with cloud-hosted time to market is immediate.

• All upgrades are made available automatically through the cloud

Mobility

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• Mobile compatibility is complex and expensive

• Anyone can connect from multiple devices

Disaster Recovery

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• Redundancy is possible, but costly

• Recovery is typically slower, negatively impacting
  customer experience

• Geo-redundancy, while possible, requires double
  the space, hardware, software, and capital

• Built-in fail-over in the event of Internet or power loss

• Calls automatically rerouted to other data centers
  so customer experience is not affected

• Geo-redundancy is built in, with no need for a
  capital outlay for space, hardware, or software